White House gets hypocritical opposing crude oil exports

The White House took a hypocritical stand against exporting crude oil this week, demonstrating the Obama administration's readiness to betray free-trade principles and progressive energy policy to appease organized labor.

White House spokesman Josh Earnest made the ridiculous assertion Tuesday that the Commerce Department should decide the fate of a law that Congress passed in 1975, and then he pandered to the Democratic base by accusing Republicans of trying to cozy up to the oil industry.

"It is pretty clear once again where Republicans in Congress and their political benefactors stand when it comes to their energy policy priorities," Earnest said.

What is clear is that the Obama administration is throwing a bone to U.S. Steelworkers, who oppose crude exports because they staff the refineries that make an excess profit thanks to the ban. Right now, U.S. oil producers must sell almost all of their crude to U.S. refiners at a discount from international crude.

The refiners, meanwhile, are allowed to export gasoline, jet fuel and other products. That's why a U.S. Energy Information Administration report recently concluded that exporting crude would have no effect on U.S. gasoline prices, because they are based on international prices, not local crude prices.

That hasn't kept U.S. Rep. Sen. Ed Markey, D-Mass., from perpetuating the myth that exporting crude would raise U.S. gasoline prices.

As a reminder that any law Congress passes, Congress can repeal, the U.S. House Energy and Commerce Committee voted to lift the ban on Thursday, with help from Houston-area Democratic Rep. Gene Green.

Green offered a common-sense amendment that would allow the president to reinstate the ban amid "any unusual and extraordinary threat to the national security, foreign policy or economy of the United States."

The White House's opposition to allowing exports is particularly disappointing, and hypocritical, when President Barack Obama is pushing two of the largest free trade agreements in history. The Trans-Pacific Partnership would expand trade with 11 countries, while the Transatlantic Trade and Investment Partnership includes the 28 members of the European Union.

The administration has been crowing about the importance of international trade to fend off critics from both parties, while trying to defend the nuclear deal with Iran, which will allow that country to export as much oil as it wishes.

How the administration can promote these agreements and the Iran nuclear deal while opposing trade in crude is beyond logic. Unless it's political logic.

The White House has already angered environmentalists by authorizing oil drilling in the Arctic, and it has picked a fight with organized labor over other trade agreements. The White House needed to do something for its base, so why not punish an industry that despises Obama and his climate change initiatives?

Think of it this way. Iran will be free to export oil to whomever it wants, while U.S. oil producers continue to be forced to sell their product to one country at a discount.

The idea that allowing U.S. companies to export oil would hurt U.S. jobs is demonstrably false when you consider how the global refining industry is structured. Other countries do not have the capacity to meet U.S. needs, nor the capital to build it.

The idea that somehow we won't need to import foreign oil because of U.S. production shows an ignorance of chemistry. U.S. refineries need types of oil that only come from overseas to operate properly.

There is no good argument against exports, only a political one. And that's how the president and his administration end up looking like hypocrites.

Chris Tomlinson has written commentary on business, energy and economics for the Houston Chronicle since 2014. Before joining the Chronicle, he spent 20 years with The Associated Press reporting on politics, conflicts and economics from more than 30 countries in Africa, the Middle East and Europe. He’s also the author of the New York Times bestseller Tomlinson Hill, and he produced the award-winning documentary film by the same name. Both examine the history and consequences of race, politics and economics in Texas.